The Level Playing Field and Determining Trade Impact under Trade Agreements: Implications from the EU–UK Trade and Cooperation Agreement

Like many newer EU Free Trade Agreements, the Trade and Cooperation Agreement (TCA) includes commitments concerning labour and social standards and environment and climate policy under the title the ‘Level Playing Field’. This title includes non-regression provisions, which prohibit reducing or weakening certain standards ‘in a manner affecting trade’, and novel rebalancing provisions, which allow the parties to take unilateral measures if material impacts on trade are arising as a result of significant divergences in levels of protection in specific areas of regulation. Although terminology linking trade to labour and environmental issues is becoming reasonably common in trade agreements, there has only been limited consideration as to what trade effects or impacts actually need to be demonstrated. This paper argues that the language of ‘manner affecting trade’ and ‘material impact on trade’ in the TCA denotes a ‘conditions of competition’ test as opposed to a stricter, and relatively more difficult to satisfy, trade remedies model. It further considers the possible application of the provisions in the context of the UK’s 2022 strikes measures, highlighting that even if a conditions of competition test is used, there are serious questions as to whether the non-regression and rebalancing provisions in the TCA are efficacious in achieving values-based objectives.